Mark Thompson's two-front war

Thompson is a burly, clever, self-confident, occasionally slightly intimidating man who until a year ago ran the BBC and is now chief executive officer of The New York Times Company. He's been at the center of a very open row with his previous employer and one much more covert with his present one — not so much because he's a troublemaker (though he seems to find it easily) but because trouble is being made for news media with high standards.

Thompson was the subject of a recent piece in New York magazine, which reported growing tension between him and Jill Abramson, the Times' executive editor. It claimed that "the role of ‘visionary' at the paper, traditionally held by the news chief, was now being ceded to Thompson," and that he was usurping some news functions. Author Joe Hagan's sources were mostly unnamed: one of them told him that Thompson had said to "a Times executive" that "I could be editor of the New York Times: I have that background." That's not an emollient statement for Abramson, two years into her job.

At a Reuters Institute event last weekend in Oxford, which I chaired, Thompson declined to speak about the BBC. He was to appear before the House of Commons Public Accounts Committee on Monday, and there was huge interest in the row that had developed between him and Chris Patten (Lord Patten of Barnes), the chairman of the BBC Trust — a hybrid regulator/cheerleader for the Corporation. Patten had professed ignorance of large severance payments made to a handful of senior BBC executives towards the end of Thompson's reign, signaling that he shared the MPs' disapproval at the size of such handouts by a publicly-owned body. But Thompson produced a 13,000-word document for the Committee, which claims that Patten, and his predecessor, were fully briefed. When he finally appeared before the MPs on Monday, he and Patten rehearsed their previous, strongly phrased, positions.

More important is the deeper issue that sparked the row and gives it its context. Thompson is at the forefront of two of the most prominent cases of one of the largest issues to face the news media: how far can they maintain the "Chinese wall" between business and editorial?

As in all other corporations, top executive salaries soared at the BBC in the 2000s. They remained significantly below the private sector: as director general, Thompson got a salary below the one he was paid by Channel Four, a much smaller operation, from which the BBC wooed him back. Yet when he left the BBC he still enjoyed a salary of nearly five times more than the annual £142,500 paid to the UK prime minister, and around ten times more than the salaries paid to the legislators who quizzed him and Patten on Monday.

The BBC line on his and the other top salaries is that they are necessary in a competitive world — just as the BBC on-air stars' packages reflect their market power. Yet the BBC isn't a proper market player. It's a public service broadcaster. In the UK at least, that implies something of a priestly dedication to the public good. The pressures of a globalized broadcasting world, where multimillion-dollar salaries are now paid from Los Angeles to Vladivostok, erode that ethic. In seeking to compete, the BBC will be dragged into more of these rows. In cleaving to virtue, it risks losing the high-rolling talent it needs. And in the commercial TV sector, channels are busy cutting or popularizing news, because the grim stuff doesn't pay.

In his weekend talk in Oxford Thompson showed plunges in the advertising revenue that had sustained the mighty Times newsroom for over a century, arguing that the only alternative was to market the paper's various types of content across many different platforms. He pooh-poohed any suggestion of rifts with Abramson on the issue.

There's a paradox about newspaper morality that is only now apparent. For a century, papers have been able to develop a regime of severe anti-commercialism — because they have been so extremely commercial. They have been the prime medium for advertising for many decades, especially where they had the monopoly position in a city. Saks Fifth Avenue could pay tens of thousands of dollars for a page or two advertising its latest lines, while a humble citizen might pay dozens of dollars to offer himself as a dog walker. Neither advertiser had anything to say about the news he was put next to. As Clay Shirky puts it, Wal-Mart funded the Baghdad bureau, like it or not.

The new news world is rearranging the Chinese walls, where it is not tearing them down. Proliferating TV channels are already polluted by advertorials that are often (deliberately) hard to tell from the "real" thing. Grand newspapers and public service broadcasters don't do that. But the grip on these walls of, especially, the newspapers becomes ever more white-knuckled. The unbreachable wall was a product of a blessed time when advertisers needed space more than the news media needed them. Now, it's reversed. Mark Thompson is astride both newspaper and public broadcasting stalwarts, and what's next for him will be instructive about what's next for us.

(John Lloyd co-founded the Reuters Institute for the Study of Journalism at the University of Oxford, where he is Director of Journalism. Lloyd has written several books, including "What the Media Are Doing to Our Politics". He is also a contributing editor at FT and the founder of FT Magazine.)